Thryv and America’s Small Business Development Centers (SBDC) recently updated a national joint study of the impact of the coronavirus (COVID-19) on small business. As devastation from the virus sweeps the nation, we committed to updating the study regularly. Week-over-week data is revealing trends in demand for small business as well as future implications for their financial stability.

Initial Findings Indicated Immediate Drop in Demand

Wave 1 of the study set a startling baseline. As of March 20 through March 23, and according to more than 850 small businesses:

82% of small businesses were “extremely concerned” about the current business environment in light of the COVID-19 outbreak.

69% of U.S. small businesses had already experienced a large drop in demand due to the coronavirus pandemic.

60% believed demand will continue to decline.

60% of small business respondents had delayed or cancelled plans for new investments, loans and expansions in light of the pandemic.

Most notably, the study revealed a sharp drop in consumer demand due to the virus. It also gave clear insight into the level of concern business owners have regarding the future.

Second Wave of Study Saw Impacts on Employee Hours and Financial Future

While some conditions stayed largely the same from wave 1 to wave 2 of the study, the second wave (conducted March 27 through March 29) revealed larger implications on employee staffing and business owners’ plans for the future.

In short, Thryv and America’s SBDC found:

73% (up slightly from 69% in wave 1) of U.S. small businesses have already experienced a large drop in demand due to the coronavirus pandemic.

Nearly the same percentage of business owners expect demand to continue to decline.

79% of business owners are “extremely concerned” about the current business environment.

74% of businesses have decreased employee hours, compared to 64% in the first wave of the study.

The most noteworthy shift came in the form of how businesses are approaching their financial future. 45% of businesses are indicating they will apply for a loan, up from 33% in wave 1 of the study.

When asked about the future (a new subset of questions added to the study wave 2):

Seventh and Eighth Waves Show Improved Level of Concern and Loan Payouts

Seventh and eighth waves of the study have been completed, with the most recent wave occurring May 4 – 10. The most significant changes show that business owners are beginning to feel less concerned and have received funding from the SBA.

The level of “extremely concerned” has hit its lowest point at 70% in wave 8, down from 74% in wave 7

The “large decrease” in change of demand has also dropped to 69% for the first time since wave 1.

Slightly more than one in four (28%) say they have received funds, up from 5% in wave 5.

Additionally, feelings about bringing employees back and longer-term prospects are improving.

The number of employees still working jumped to 41%, and another 28% said employees will return when they are allowed to reopen.

Businesses that believe they would completely recover one year from now increased to 28% in wave 8, up from 21% in waves 5 and 6.

Applications and loan payouts saw significant changes, as well

Most small businesses that applied for SBA loans have now been approved, increasing from 43% in Wave 7 to 65% in wave 8.

Among businesses that said their loans were approved, 92% said they have received the funds.

Ninth Wave Shows Businesses are Torn about Safety & Reopening

The ninth wave of the study has been completed, with the most recent wave occurring May 10 – 17. For this wave, small businesses answered new questions about concerns that a second wave of the virus is imminent and how their volume now compares to 12 months ago.

Many of the trends continued in a positive direction. For instance, those saying they are extremely concerned about changes in demand has fallen below 70% for the first time since the study began.

Also, businesses saying they will not have to decrease employees hours has continued to improve, with 30% saying they do not need to reduce employee hours.

However, some businesses are torn between staying safe and the need to save their businesses.

64% are very or somewhat concerned about a second wave of the virus.

However, more than half (57%) think waiting a couple more weeks to re-open is too long.

Even among those that are concerned about a second wave of the virus, 38% think a couple more weeks is too long.

Other major impacts of COVID-19 include SBA loans and overall business volume.

Almost half (49%) the small businesses that received an SBA loan think they will not need to repay it.

Most (57%) small businesses are operating at 50% or less of their volume this time last year. Slightly less than 15% say they are operating at 100%.